WTI remains range-bound as Middle East supply concerns offset weak momentum

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Supply disruptions keep oil prices volatile

U.S. inventory draw contrasts with mixed fuel demand

The latest EIA report showed an unexpected decline in U.S. commercial crude oil inventories of 3.19 million barrels in the week ending October 2, to 424.1 million, although analysts had expected an increase of approximately 1.9 million. Meanwhile, inventories at Cushing rose by 444,000 barrels to 24.7 million, while U.S. refinery utilization increased to 92.7%.

U.S. oil production reached approximately 14 million barrels per day, indicating that domestic supply remains high. Petroleum product data were less favorable: gasoline inventories rose by 382,000 barrels to 204.7 million instead of the expected decline, while distillate stocks decreased by just 42,000 barrels to 105.1 million.

Nevertheless, distillate inventories remain approximately 12% below the five-year average, indicating persistent tightness in the diesel market. Thus, the decline in crude oil inventories supports the market, but gasoline and distillate data do not indicate a clear strengthening of demand.

EIA raises oil price forecasts amid tighter global supply

In its forecast published on October 6, the EIA significantly revised its expectations for the global oil market. The average Brent price in the fourth quarter of 2026 is now projected at $105 per barrel, $14 above the previous estimate, while the forecast for the full year 2026 has been raised from $91 to $96. Expectations for 2027 have also been revised upward from $74 to $84 per barrel.

The agency estimates that global oil inventories declined by approximately 1.9 million barrels per day in the third quarter and forecasts a further reduction of 0.7 million barrels per day in the fourth quarter. The main reason is the continued restrictions on Middle Eastern exports and high transportation costs.

At the same time, the EIA expects a gradual recovery in shipments through the Strait of Hormuz and alternative routes, which should allow most of the shut-in production capacity to return by mid-2027. The projected increase in U.S. oil production from 13.9 million barrels per day in 2026 to 14.3 million in 2027 should also partially offset restrictions on global supply.

Shipping disruptions keep geopolitical premium in focus

The situation in the Middle East remains the main source of price volatility. Attacks on tankers near the Strait of Hormuz have become more frequent over the past week, while additional attacks on Saudi Arabian infrastructure have raised concerns about the reliability of alternative export routes.

According to market participants, shipments through the strait fell to 4 million barrels per day on some days, compared with approximately 15 million in late September. Yesterday, statements by U.S. President Donald Trump about productive contacts with Iran and the absence of plans for new U.S. strikes before the midterm elections somewhat eased concerns about further escalation, although actual shipping restrictions remain in place.

Additional uncertainty comes from disruptions to production in the Gulf of Mexico due to an approaching tropical storm. Under these conditions, WTI may trade in both directions, with demand potentially remaining strong on declines toward $90.00–89.00, while selling interest may emerge on rallies toward $95.00–96.50. A breakout from this range, as stated in the article WTI retreats toward $92 as supply concerns clash with rising production forecasts, will indicate the direction of the next move.

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